Moving Product Can Hurt Your Business

Transporting product between processes is a cost – which adds no value to the product.

Excessive movement and handling cause damage and are an opportunity for quality to deteriorate. Moving product can hurt your business and can be difficult to reduce due to the perceived costs of moving equipment and processes closer together. It is often hard to determine which processes should be next to each other. Mapping product flows can make this easier to visualise for most steel business associated with manufacturing, fabrication and building.

Transportation tends to hide problems on the workshop floor and overall business processes, which must be identified and resolved in order to improve operating performance. Unnecessary transport can increase lead times, allows for unproductive floor space, delays the identification of internal problems, and inhibits communication. By achieving a seamless flow between production and the required movement of product will lead to an improvement in customer service and reduce other wastes and associated costs.

The Steel Efficiency Review® process recommends operations and productions teams to move product based on customer demand not business inefficiencies. Transportation often leads to operations having to wait for product to be delivered due to delays (the waste of waiting), thus costing steel business more money as well as extending lead times and creating customer delivery problems. Excessive transport also gives many opportunities for handling damage and losses, building more problems and allowing for product quality to deteriorate.

We have found if you could eliminate or possibly reduce Transportation the savings would go to improving the profit in your business. And it starts with identifying the common causes – comprising:

  1. Excess Inventory Driven By Over Production – The waste of Over Production which in turn leads to the waste of Inventory; Inventory that then has to be transported throughout facilities or between warehouses and even states. The causes of this Over Production can be everything from excessive setup times and the need for economic batch sizes to the legacy issue “that is the way we have always done it”.
  2. Pool Warehouse Layout – Excessive Transportation can also be caused by poor warehouse layout. Steel businesses are often organized in functional silos; that is they have discreet areas for specific functions such as welding, pressing, cutting, etc. This leads to the need to transport product from each of these areas to the next and at times back again after each function is completed. Even within each functional area we have found excessive gaps are left between operations requiring the need to use things like fork lifts or overhead cranes to move product about.
  3. Part Deliveries To Compensate – Making part deliveries to customers to compensate or hide poor production processes and delivery performance will only make things worse moving forward. Moving material in batches not driven by customer demand will ultimately hurt your cash flow and encourage inefficient movement of product.

To help with Excess Transportation, our SER® consultants have recommended the following 3 key solutions:

  1. REVIEW OF WAREHOUSE LAYOUT AND PRODUCTION LINES – Layout should be reviewed and changed as per the principles of lean manufacturing, create value streams and make that value flow at the pull of the customer.
  2. ENABLING JUST IN TIME (JIT) PRODUCTION – By making value flow at the pull of the customer, the idea of Just in Time (JIT) production can be enabled.
  3. CHALLENGE AND REDUCE PRODUCT MOVEMENT – Challenging and reducing transportation and the movement of product internally and externally will expose other linked wastes, such as over production and time in motion.

We have found if you could eliminate or possibly reduce Excess Transportation the savings would go straight back on your bottom line. The Steel Efficiency Review® aims to provide recommendations to change and improve our customer’s business and at the same time our product and service offer.

Download our State of Market Reports for our insights and learnings after completing 1,011 Steel Efficiency Review® consultations on businesses of all shapes and sizes across Australia. To register for your own FREE Steel Efficiency Review® click here.